Government set to cut support for new solar farms above 5MW

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The Department of Energy & Climate Change (DECC) is to scrap its support for solar farms of a capacity above 5MW from April 1, 2015, it has announced.

Such solar farms will now have to compete with other renewable energy sources for financing: This has resulted in condemnation of the move from a host of renewable energy campaigners and power companies.

Under the current system land owners can earn subsidies of up to £1,000 per acre per annum up and for up to 25 years by utilising the land for solar farming. However the government now wants to bring the scheme to an end two years ahead of schedule in favour of supporting smaller scale and community led energy production.

The DECC issued a statement in which it declared the spread of solar had occurred a lot quicker than it anticipated and as a result it needed to mange its financial support schemes more effectively and responsibly.

The statement continued: "So we are also consulting today on proposals to close the Renewable Obligation system to new solar PV capacity above 5MW from 1st April 2015, across England, Wales and Scotland. Those proposals include grace period arrangements to protect developers who have already made significant financial commitments."

The Renewable Obligation system discussed in the statement is very much a one-way mechanism - generators are paid regardless of change in electricity prices or production costs. In the case of solar, production has dropped significantly over the last four years, however due to the mechanism in place, the government has been unable to reclaim any subsidy.

Instead, it will now look to bring in a method called 'contracts for difference' where larger solar farms have to compete against onshore wind and other established technologies.

Friends of the Earth energy campaigner, Alasdair Cameron, criticised the shift in government renewable energy policies.

He said: "Financial support for solar has already fallen, and any further reductions should only be carried out in a planned way as [the] costs [of the equipment] drop.

"But suddenly pulling the rug out from under a popular growing clean energy industry makes no sense, and would put thousands of jobs at risk."

Solarcentury head of public affairs, Seb Berry, echoed the sentiments of Cameron and claims the move is at odds with the work solar companies such as his are carrying out in the renewable sector.

He said: "Today's announcement is unnecessary and totally at odds with the government's desire to reduce the cost to energy bill payers of delivering the 2020 renewable energy target.

"This policy proposal will undermine investor confidence in the entire UK renewable energy sector, by removing at a stroke the short and medium-term policy certainty required for major project investments."